SWISS FIRM ISSUES MAJOR WARNING: The Financial System Is Rigged, But It’s Going To Fail

Today a Swiss firm issued a major warning that yes, the current financial system is rigged, but it’s going to fail.

Rigged to Fail—From Musk to Powell
March 7 (King World News) – Matthew Piepenburg at Matterhorn Asset Management (based of Switzerland): For quite some time we have been warning about the rising shark fin of rising yields and rates.

As of this writing, one can almost hear John Williams’ orchestral theme song to Jaws ringing in our ears.

The Slow Creep
Mortgage rates in the U.S. have hit 3%, oil prices are now at levels not seen since 2018 (as broader commodities in general are on the rise) while the tech stocks of the NASDAQ (most of which thrive on cheap rates) are now predictably down nearly 10% from their February 12th peak.

Rates are up, the dollar is up and as Barron’s reporter, Janet H. Cho, observed: “Things are getting interesting.”

Unfortunately for Barron’s readers, however, these “interesting” developments have little if nothing to do with what she described as “economic growth picking up.”

Economic growth? Huh? Really? C’mon…

Spinning the “economic growth” meme for rising yields is akin to attributing Lance Armstrong’s cycling success to an apple-a-day rather than a steroid per week.

What Barron’s feature articleis conveniently overlooking is the far more obvious fact that investors, here and around the world, are calling the Fed’s bluff, not swooning over “economic growth.”

With over $8 trillion in combined household, government and corporate debt, investors are catching on that Uncle Sam’s credit score is tanking.

The recent $1.9T aid package is yet another staggering example of the U.S. borrowing and spending infinitely more than it earns, with a debt to GDP ratio well past the 100% Rubicon.

In sum, there are less and less buyers for U.S. Treasuries, which explains why yields on the 10-Year have topped 1.5%.

Thus, to call the foregoing scenario a backdrop to “economic growth” is a fairly open and obvious charade, almost shameful, but certainly shameless.

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